IBM has emerged victorious from a courtroom battle with LzLabs, which it says stole trade secrets relating to its mainframe technology.

The High Court in London ruled on Monday that Switzerland-based LzLabs and its owner, the entrepreneur John Moores, breached licensing terms by using IBM’s mainframe to help develop its own software.

Big Blue’s case came to court last year, with the IT giant claiming that Winsopia, a UK subsidiary of LzLabs, bought an IBM mainframe computer and an accompanying license in 2013. The company then used this access to reverse engineer IBM’s mainframe software.

In a written ruling, Judge Finola O’Farrell said Winsopia breached its IBM license terms and that “LzLabs and Mr. Moores unlawfully procured (those) breaches.”

Moores is the founder of BMC Software and now runs a VC fund, JMI Equity, which invests in IT businesses. He and LzLabs argued that the company’s software had been developed over a decade, without any influence from IBM’s technology.

DCD has approached LzLabs for comment. An IBM spokesperson said: “IBM is delighted that the Court has upheld our claims against Winsopia, LzLabs GmbH and John Moores. The Court found that these parties had conspired to breach Winsopia’s license agreement in a deliberate, systematic and intentionally hidden effort to unlawfully reverse engineer critical IBM mainframe technology. This technology represents billions of dollars of IBM investment.”

A further hearing will take place later this year to determine any damages due to be paid. IBM saw claims against another British subsidiary, LzLabs Limited, as well as the company’s current and former CEOs, rejected.

LzLabs was founded in 2011, and launched its first product in 2016, a platform that enabled mainframe workloads written in Cobol or PL/1, to run on x86 servers and Linux.

The company has since updated its products for containerized workloads, and signed up customers including telco Swisscom which, according to LzLabs, “successfully moved its entire mainframe workload of business-critical applications to SDM running on Linux systems in the cloud,” without having to recompile it.

This puts the company in competition with IBM, which continues to market mainframe and mainframe modernization through its IBM Z business unit. The company’s latest mainframe, the now three-year-old z16, is outperforming prior models when it comes to longevity, IBM said in July 2024.

IBM opened a separate court case against LzLabs in Texas in 2022, alleging patent infringement. In this case, it is seeking damages and an injunction preventing LzLabs from marketing products containing the IBM IP.